Question: Write 1 paragraph for each questions
1. What guidance do you find on capitalization of interest in IFRS? How is it different or similar to U.S. GAAP?
2. When capitalizing interest there is a limit that the lower of actual interest and avoidable interest should only be capitalized. How do you compute avoidable interest and actual interest? Illustrate with examples.
3. Complying with cost principle of accounting, long-term assets are reported in the balance sheet at the acquisition price without regard to the changes in the market price of these assets. Questions are very often raised that reporting asset at cost will not exhibit the correct financial position of a company. What are your thoughts? Should the asset be reported only at cost or do we need to report them at fair value?
4. How do you record the disposal, involuntary conversion, and contribution of a long-term asset?